Severance Packages: Ensuring Fair Compensation

A severance package is offered when an employee’s employment is terminated without cause. It is intended to compensate for the loss of employment and can include salary continuance, lump sum payments, benefits, and other entitlements.

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What Should a Severance Package Include?

• Statutory termination pay under the Employment Standards Act
• Common law notice or pay in lieu of notice
• Continuation of health and other benefits
• Pension or RRSP contributions
• Bonus or commission entitlements
• References or outplacement services

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Common Issues with Severance Packages

• Insufficient compensation based on years of service and position
• Improper calculation of bonus or commission pay
• Forfeiture clauses reducing entitlements
• Pressure to sign a release quickly
• Termination clauses limiting rights

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Why Legal Advice Matters

Employers often offer less than what employees are legally entitled to, relying on termination clauses or lack of employee awareness. Accepting a severance package without legal review can result in significant financial loss.

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How Legal Support Can Help

Hamilton Employment Lawyers review severance packages, negotiate improved offers, and challenge unfair termination clauses. Legal representation ensures employees receive the maximum entitlements under common law and employment standards.

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